How Jerry Brown could end agencies’ job transfer game

Four legacy projects for Gov. Jerry Brown: high-speed rail, water tunnels, retiree medical costs and ... how the state budgets for salaries?

The first three topics have been in the headlines for years. Recent events argue for the governor adding the fourth to his agenda.

Last week, following a Sacramento Bee 2014 investigation, the Brown administration issued an audit that found departments routinely use fake employee transfers to hoard vacant job positions and the money budgeted for them. It’s gone on for decades.

The illegal practice circumvents a law that abolishes positions vacant for six months. The money for those unfilled jobs should go back to the funding source.

Departments “transfer” employees in and out of positions before the fill-it-or-kill-it deadline by manipulating job serial numbers assigned to workers who don’t even know they’ve “moved.” The unspent money can be legally used for other things like rent, copy paper or paying off leave balances.

The Bee found a state executive, for example, who was moved 11 times between three positions over the course of 18 months. Thousands of questionable transfers shielded an estimated $80 million, at least, The Bee found.

The state audit sampled about 800 transactions in 10 departments. The majority ranged between questionable to flat-out illegal. An administration spokeswoman said Brown’s May budget revision “will include specific proposals to respond to the issues raised in the audit.”

So what might they be? We asked former Finance Director Mike Genest for Brown’s options. Here were his suggestions:

Budget reboot. Some departments play the positions game to cover unfunded costs, such as when rent goes up or postage costs increase. Brown could make a trade-off: Fully fund operating budgets and strip out unused positions. Downside: Brown did this a couple years ago, but the vacancy game continued.

Yer out! Make ordering or executing faux transfers a fireable offense. Right now, there are no consequences. Downsides: The state’s arcane hiring system can take more than six months. Eliminating and re-establishing positions will slow that more. Some departments are so strapped that they can’t run without shifting salary funds. You want to fire people for dealing with that?

Cut off the checks. Enact a law that says the state controller can’t write checks from salary funds for anything else. Downside: It doesn’t deal with underfunded operating budgets, one reason departments manipulate vacancies.

Fuggedaboutit. Dump the state’s policy to budget positions separately. Instead, blend personnel budgeting with departments’ other budgets into one pot of money. Downside: The state is bureaucratically locked into budgeting for positions. How would oversight work?

Brown has said he’s committed to reshaping state government. Here’s a chance to do it.

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The Sacramento Bee launched The State Worker blog in 2008 to cover state government from the perspective of California government employees. Every day The Bee filters the news through a single question: "What does this mean for state workers?" Subscribe to alerts on state pay, benefits, pensions, contracts and jobs at sacbee.com/newsletters. Twitter: @TheStateWorker.